Thailand launched air strikes against Cambodia on Monday as a new wave of fighting erupted between the southeast Asian neighbors, marking the potential collapse of a peace plan presided over by US President Donald Trump just two months ago.

Trump announced the agreement to restart the ceasefire in a social media posting following calls with Thai Prime Minister Anutin Charnvirakul and Cambodian Prime Minister Hun Manet.

The tills at Siem Reap's Old Market, which is popular with tourists, are usually busy ringing in December, the high tourism season in Cambodia.

Escalating border fighting has shut down over 2,000 schools across Thailand and Cambodia, affecting 216,000 students. Experts warn of a lost generation as 600,000 are displaced by the conflict.

The escalation broke the ceasefire brokered in July by Trump who threatened to halt trade talks with the two countries unless they ended the fight.